Green technologies: Big opportunity for European firms
The global market for green technologies represents a
big opportunity for European firms. Currently, the global market for
environmental goods and services is estimated to be around €1000 billion
per annum - and this is expected to double or even triple by 2020.
Europe produces some world leading eco-technologies.
Our core environmental industries that are active in the fields of
pollution management and control, waste collection and treatment,
renewable energy and recycling have a combined turnover of over €300bn;
provide more than 3 million jobs, and have an impressive overall global
market share of approximately 1/3rd. This sector is offering
many new and skilled green jobs and exploiting first mover advantages.
And as European industries have to thrive or strive in the global arena
the external competitiveness implications of our actions are also
crucial.
The global market for green technologies represents a
big opportunity for European firms. Currently, the global market for
environmental goods and services is estimated to be around €1000 billion
per annum - and this is expected to double or by 2020.
But neither Europe nor industry can do this alone. In
a globalised world, we have to be realistic and reasonable about our
industry’s potential contribution to worldwide environmental
improvements. The EU is working hard to obtain ambitious and effective
outcomes in Rio+20 and in climate and other relevant negotiations. Each
region’s responsibilities and priorities are different but as we share
the planet, we must all be part of the change we want.
It is encouraging to see that in Europe significant
decoupling of economic growth and environmental impact has already been
achieved and is continuing. Policies like Ecodesign are driving this
change and helping to deliver more sustainable, products, production and
consumption. Corporate Social Responsibility is also a flexible and
effective way to encourage companies to do the right thing for societies
and the planet - think partnerships instead of polemics.
Example: Impressive employment developments in eco-industry sub-sectors
Recycling recorded the fastest growth rate among the
largest eco-industry sub-sectors (recycling, waste supply, wastewater
treatment and waste management). Admittedly, its annual growth rate
could not match the renewable energy sub-sector, which expanded by 37 %
per year in the period 2004–2008 (EREC, 2010). However, the annual
increase of recycling's turnover was still very rapid at 17 %.
The growing importance of the recycling sub-sector is
also apparent in its increasing scale relative to the economic output
of key sectors. In the period 2004– 2008 the value of recyclables
relative to the gross value added of the manufacturing, electricity and
waste management sectors increased from about 1.7 % to 2.7 %. Although
the financial crisis has reduced this level, the importance of recycling
for the economy is still greater in 2009 than five years earlier.
As figure below shows, overall employment related to
materials recovery in Europe has increased steadily, from 422
inhabitants per million in 2000 to 611 in 2007, which is an increase of
45 %.
Employment growth in EU eco-industry sub-sectors in the period 2000–2008
Waste management |
2000 844 766 |
2008 1 466 673 |
% 7.14 |
||
| Water supply | 417 763 | 703 758 | 6.74 | ||
| Wastewater management | 253 554 | 302 958 | 2.25 | ||
| Recycled materials | 229 286 | 512 337 | 10.57 | ||
| Others | 129 313 | 193 854 | 5.19 | ||
| Renewable energy | 49 756 | 167 283 | 16.37 | ||
| Air pollution | 22 600 | 19 067 | 2.10 | ||
| Biodiversity | 39 667 | 49 196 | 2.73 | ||
| Soil and groundwater | 14 882 | 18 412 | 2.70 | ||
| Noise and vibration | 4 176 | 7 565 | 7.71 | ||
| Total | 2 005 764 | 3 441 102 | 6.98 | ||
How to promote sustainable production?
This calls for a twin-track approach to encouraging
sustainable (green) growth across all industry sectors while taking
initiatives to help the environmental goods and services sector. To help
bring about a more competitive and more environmentally sound industry,
we also need to move beyond consideration of products and traditional
services, adopt a value-chain approach and look more into innovative
ways of organising production modes, cooperation and partnerships
between businesses (e.g. green business models, industrial symbiosis).
We know that many of the most resource-efficient economies are also the
most competitive. But we also know that the transition will not be cost
free and will require significant investment by industry.
Recycling can be an important source of raw materials
But how could Europe call for a new industrial
revolution without considering the elements that are absolutely
fundamental for the development and reinforcement of its industrial base
- that is raw materials. 360 kg of lead; 343 kg of zinc, 1630 kg of
aluminium, 14883 kg of iron and 561603 kg of sand and gravels are
consumed during the life of a European.
However, for a number of these raw materials,
considered "critical" by the European Union, the EU is largely dependent
on third countries' production. This is, for instance, the case of
indium, used in photovoltaics and flat screens, antimony (e.g. flame
retardant) and cobalt (e.g. building and transportation) or of the now
renowned rare earth elements, essential for permanent magnets in
electric cars and wind turbines, with a 100% import dependency rate, or
graphite, with a 95% import dependency.
Confronted to the very basic need for a secure supply
of raw materials, innovation can be a major driver for progress. And in
today's globalised world, it is even a prerequisite if European
companies are to survive the competition of developed but also emerging
countries.
Although Europe is a world leader in recycling, there
is still room for significant improvement. For example, only 17% of
metals in mobile phones are being recycled today. When only 40% of waste
material of iron and steel is reused today, it has the potential to
reach up to 55% of future consumption. For other metals, recycling could
potentially contribute to up to 50% of consumption. New technological
solutions have to be found so that critical raw materials can be
recovered.
But recycling will not, on its own, provide the
solution. Europe needs to improve raw materials production within its
own territory. It has been estimated that the value of unexploited
European mineral resources at a depth of 500-1,000 metres is about € 100
billion: there is a need to mine at lower depths, in more remote areas
and under harsher conditions.
There is also a need to increase knowledge of
Europe's geological potential, develop alternatives and substitutes for
critical raw materials, and reinforce the skills in these different
fields to meet the challenges ahead, along the entire raw materials
value chain.
That is why the European Commission has proposed, on
29 February 2012, to launch a European Innovation Partnership on raw
materials, which will aim to push Europe to the forefront in raw
material exploration, extraction, processing, recycling and substitution
technologies by 2020.
For example, it has been estimated that the value of
unexploited European mineral resources at a depth of 500-1,000 metres is
about € 100 billion. (IP/12/196 – More information on raw materials).
Low energy buildings: Still a limited market uptake with high CO2 saving potential
In low energy buildings, as much as 80% of the
operational costs can be saved through integrated design solutions;
however there is still a limited market uptake. So far, around 20.000
low energy houses have been built in Europe of which approximately
17.000 in Germany and Austria alone.
At present, seven EU MS have defined for themselves
when a building is a low energybuilding (AT, CZ, DK, UK, FI, FR and DE,
BE (Flanders), a few more (LUX, RO, SK, SE) plan to do so. Typically the
required decrease in energy consumption will range from 30 to 50 % of
what is defined for standard technology for new buildings.
EU Member State policies on low energy buildings
Austria
|
Planned: social housing subsidies only for passive buildings as of 2015
|
Denmark
|
By 2020 all new buildings use 75 % less energy than currently enshrined in code
|
Finland
|
30 – 40 % less by 2010 : passive house standards by 2015
|
France
|
By 2012 all new buildings are low energy buildings (Effinergie standard), by 2020 new buildings are energy-positive
|
Germany
|
By 2020 buildings should be operating without fossil fuel
|
Hungary
|
New buildings to be zero emission buildings by 2020, for large investments already in 2012
|
Ireland
|
60 % less by 2010, Net zero energy buildings by 2013
|
Netherlands
|
50 % reduction by 2015, 25 % reduction by 2010 both compared to current code plans to build energy-neutral by 2020
|
UK (England
and Wales)
|
44 % better in 2013 (equivalent to Passivhauslevel) and zero carbon as of 2016
|
Sweden
|
Total energy use / heated square metre in dwellings
and non residential buildings should decrease. The decrease should
amount to 20 per cent until 2020 and 50 per cent until 2050, compared to
the corresponding use of energy in 1995.
|
In summer 2012 the Commission will present a communication on its ideas to promote sustainable construction in the EU.
Key enabling technologies – Europe is not reaping the full benefits
The global market in Key Enabling Technologies
(KETs), notably micro- and nanoelectronics, advanced materials,
industrial biotechnology, photonics, nanotechnology and advanced
manufacturing systems, is forecast to grow from EUR 646 Billion to over
EUR 1 Trillion between 2008 and 2015; this is a jump of over 154%, or
more than 8% of the EU's GDP. Rapid growth in jobs is expected. In
nanotechnology industries only, the number of jobs in the EU is expected
to increase around 400,000 by 2015. Europe is a global leader in KETs
research and development with a global share in patent applications of
more than 30%. Despite this, the EU is not translating its dominant
R&D base into the goods and services needed to stimulate growth and
jobs.
KETs potentials: KETs are a key
source of innovation. They provide indispensable technology bricks that
enable a wide range of product applications, including those required
for developing low carbon energy technologies, improving energy and
resource. The Europeans Commission will present in June 2012 a
communication on how it intends to promote KET that they give European
industry a competitive edge in deploying the industrial technologies of
the future.
Space - A high tech industry defying global competitions
The European navigation and Earth observation service
industry is an emerging industry with a high worldwide potential for
growth and job creation, mainly made up of SMEs and start-ups which form
the backbone of our economy. It is estimated that, already, 6-7% of GDP
in Western countries, i.e. € 800 billion in the European Union, is
dependent on satellite radio navigation. The deployment of Global
Navigation Satellite Systems and GMES infrastructures will soon open up
new opportunities for the sector in Europe. Galileo and EGNOS are
expected to generate economic and social benefits worth around € 60-90
billion over the next 20 years. Europe cannot afford to miss out on this
growth sector. Although some private applications have already proven
successful, satellite enabled products and services still depend to a
large part on public customers at national and local levels at this
stage of development.
Galileo will boost economy and make life of citizens easier
Promoting electric car/less polluting cars
In summer 2012 the European Commission will issue
EU-wide guidelines for incentives to incite consumers to purchase energy
efficient cars, enabling car manufacturers to realise economies of
scale, which is currently not possible as Member States have different
systems in place which forces car producers to run costly, smaller
series of eco-friendly cars.
How can EU action help?
Overcoming the bottleneck of access to finance
EU firms are facing a credit crunch that is likely to
worsen further as the banking system restructures and deleverages. It
is rather alarming that enterprises face insufficient access to
appropriate sources of risk capital, since this continues to be one of
the most significant constraints to the creation and development of
growth-oriented firms.
We must therefore consider the broader picture: as
capital markets are being transformed by the crisis and the regulatory
reforms that it has triggered, we shall review what new possibilities
are created by these changes. It is necessary to consider new ways of
improving financing conditions for SMEs and to strengthen the whole
range of risk capital markets.
What can be done?
Reserving part of the new resources from the Growth Agenda to loans to SMEs for this same purpose could considerably increase our potential. It is important to underline that this support must be provided on a commercial basis, such as the new Risk Sharing Instrument which is being RSI)
is being created under the EU's Seventh Framework Programme for
Research (FP7). It is expected to unlock a further €6 billion of loans
until the end of 2013, including up to €1.2 billion for SMEs.
Moreover Europe is providing a balanced mix of flexible financial instruments under the current programme period (2007-2013) to support SMEs.
- The financial instruments (loan guarantees and venture capital) of the Competitiveness and Innovation Framework Programme (CIP) with a budget of €1.1billion will enable financial institutions to provide about €30 billion of new finance for more than 315 000 SMEs.
- In the field of Cohesion Policy,
the JEREMIE facility (Joint European Resources for Micro to Medium
Enterprises) provides access to finance to SMEs by means of equity,
loans or guarantees. In the current financial period the measures are
estimated to amount to at least €3 billion.
- The European Progress Microfinance Facility (Progress Microfinance)
aims to increase access to microcredit (loans of up to €25 000) for
individuals who have lost or are at risk of losing their job or have
difficulties entering or re-entering the labour market.
- During 2011, the European Investment Bank Group provided €13 billion of finance for SMEs and midcaps companies. Overall more than 120 000 SMEs received EIB Group support across Europe last year.
- For the forthcoming programming period 2014 – 2020, the Commission is aiming at increasing the use of financial instruments.
In the context of the COSME Programme it is proposed to dedicate €1.4
billion to debt and equity instruments that support SMEs and to build on
the success of the financial instruments established under the
Competitiveness and Innovation Framework Programme.
